Children hospitalized with severe illness in sub-Saharan Africa are at high risk of morbidity and mortality following discharge from hospital. These children represent an accessible high-risk population in which targeted interventions to prevent morbidity and mortality could have dramatic impact. A large cluster randomized trial of azithromycin delivered in a mass drug administration program within trachoma endemic areas in sub-Saharan Africa demonstrated an almost 50% mortality benefit in children 1-9 years of age in treated communities. However, mass drug administration of azithromycin leads to the rapid emergence of macrolide resistance within treated communities and is expensive. The targeted delivery of azithromycin to children at hospital discharge may be a novel and practical intervention to maximize benefit while minimizing risk of antibiotic resistance. We propose a randomized, double-blind, placebo-controlled trial to determine the efficacy of azithromycin provided at discharge, compared to placebo, in reducing mortality and re-hospitalization rates in children age 1-59 months in Kenya. The study will also investigate potential mechanisms by which azithromycin may reduce morbidity and mortality in this population and will assess the emergence of antibiotic resistance among treated individuals and their primary caregivers. A cost-effectiveness analysis of the intervention will also be conducted.